Rakich talks about the dominance of the streaming giants and their working practices, accessing incentives, studio space and crew practices

    by Chris Evans/reposted with permission from KFTV.com

    John Rakich has more than 20 years production experience with credits, including Jupiter’s Legacy, The Dark Tower, My Big Fat Greek Wedding 2, Carrie and the Hannibal TV series.


    Can you tell me a little bit about yourself and what films you’re working on at the moment?

    I have dabbled in everything from long format features to mid-range format television and series, but predominantly in the last couple of years I have been working on episodic television, mostly for streaming services. The last few years has been a lot of Netflix Originals and I am on a series now for Apple TV+.

     

    And how do things differ working with streaming giants rather than standard studios?

    It’s not much different and is often the same people playing musical chairs between companies. There are so many new companies popping up. In the case of Netflix, I was doing some preliminary work for a series and the production executive I worked with changed on a weekly basis – there are so many new opportunities opening up. It can also be old people I have worked with before too. A lot of the companies are growing so quickly that there are some growing pains – the infrastructure isn’t there or best practices haven’t been established. It’s not that much different though.

    Netflix are shooting all over the world and often taking over entire locations.

    The studio I’ve been working in here (Pinewood Toronto Studios) is somewhat of a Netflix hub. Almost 90% of the content created here is either original for Netflix or will be distributed by them outside of other markets. There are a few shows that aren’t, like Star Trek Discovery, but it’s on Netflix in Europe, so technically they can still call it a Netflix original in certain markets. There is very little that’s not being done for a streaming service right now in this town. Maybe the odd feature film. If it’s not for a streaming service, it’s for a network that is creating one. CBS just opened up a facility here and it’s just content for their own network and streaming service. There’s just a lot of content being made here!

     

    Does this cause problems? Do you have producers trying to shoot in your territory but find they can’t do so because it’s been booked?

    Labour and infrastructure are the biggest pinches. We have over three quarters of a million square meters of state space coming online in the next 10 months to accommodate for the need. The biggest impact is there’s not enough skilled labour yet. We can hire new people, but we don’t always need them at the beginning, we need them two years down the line when they have more experience under their belt. So that’s a bit of a stressor right now. Television is now basically shooting small movies – no different budget-wise. Look at some of the money Apple is spending – Apparently one of their shows was $15m an episode. For eight hours of content that’s $180m, which is more than most movies start off with and that’s just for 90 minutes of footage.

     

    Do you think this is sustainable? All this flashing the cash?

    Disney is the sleeping giant. One thing it has, which the others don’t have, is back catalogue. Disney can rest for a while. It’s funny, when Netflix came on the scene, they came up with the whole binge-watching thing. Drop a whole show which everyone will talk about. The other streamers are going the other way with episodic rollouts. TV is now becoming an event again, “I can’t wait for next week’s episode”. Look at the Mandalorian – Who didn’t talk about baby Yoda! You talked about it for several months, not just a weekend. Is it sustainable? Being 20 years in this business I don’t think so but who knows anymore. There’s just so much content. I have a feeling there will be mergers coming up in a while, so studios can stay competitive when they’re dealing with giants with big bank rolls.

     

    The streaming giants are actually struggling financially though.

    I know, Netflix has no money, it’s deficit spending. Then you have Apple, Amazon and Disney who are cash rich. I can see someone gobbling up someone else in the next year.

     

    Any idea who?

    My guess would be Apple. If it’s not a streaming service, it will be one of the networks that doesn’t have a big company behind it. If content is king, you need back catalogue as well and who doesn’t have any right now? Apple. So, they just buy it. HBO have a huge back catalogue. NBC is not going to spend a ton of money on content, but they have a huge back catalogue of shows. 20 years of Law and Order, 22 years of Special Victims Unit. That’s why people keep watching.

    Netflix is spending like mad because every year they lose 20% of their back catalogue in deals that are expiring. That’s why they’re producing so much content; to fill the void. Apple has seven shows, iTunes is failing, but they have the money to buy someone. It’s why Disney bought Fox, for the back catalogue.

     

    How do initial conversations with production teams tend to go now? Has it changed a lot in the last few years?

    Fundamentally it hasn’t changed too much, it’s just the upfront conversation has to be about creative expectations.

    Line producers can’t go back to pulling out budgets from 10 years ago and saying this is what it’s going to cost – things have changed. Shows have got bigger; crews have got bigger and visual expectations are bigger. Even the equipment has got larger. Most of the streaming services are now filming on large format cameras which means more lights and more crew. Everything spins higher and bigger. Whereas with feature films everything is getting more low-budget and artsy. Sometimes TV shows are massive.

     

    How much of the decision making is based on the crew and facilities available at the locations you’re going to and how much is based on incentives?

    That hasn’t changed much. No one is going to publicly say they don’t have crew and tell us to go away. The nature of the beast is that the minute we know that in our mind that’s no for the next year and you don’t want to chase anyone away. Incentives-wise it’s not even so much the local incentives anymore. Studios are looking at the visual effects incentives that are becoming the big ones. I’ll take an example of a friend on a show right now – their VFX supervisor has been told 20% in British Columbia, 20% in Quebec, 20% in Ontario, 20% in NY and then the rest you can do wherever you want. That’s your VFX spend. Why? All four of those have VFX credits which are stackable and which you can combine. You watch any big movies now and that’s what you’ll see the thank yous for. Co-productions are next. That’s the way to deal with making more, when you can combine the credits together. One doesn’t take over the other, you can combine them together and make even more bang for your buck. There’s a show currently filming in Ireland for Apple where I believe the art department is here (in Canada). The designer has travelled to Ireland, but the flesh and blood art department is in Canada. This means you can double up tax credits.

     

    That seems to be working OK at the moment.

    Sure. It’s a digital day. I can send you finals to wherever you are, you don’t need to be looking over my shoulder but if you need to there are ways to do that too. The teleworker can work in this industry too. A VFX supervisor can manage vendors all around the world now, he doesn’t have to fly out there. Technology is changing things – things are still staying the same but changing at the same time. Like anything in this business it’s always a little odd.

     

    Are territories becoming aware of that? They’re all about competing with incentives.

    Decisions are made on creatives, but they are also made on incentives. Always have been, always will be.

     

    Are they offering more VFX and post-production incentives as well as the standard ones?

    That is starting to happen. Here in Ontario we have done that. We are doing a lot more post-production here. Shoot your movie where you want, just do your post here and get a 30% incentive. It is a labour credit in Ontario. Again, because post can be done anywhere.

     

    You mentioned before about the expansion of studio facilities available. What’s happening on that front in Canada at the moment?

    I know in Vancouver and Ontario we have been in deficit for a couple of years. You asked earlier if the work is sustainable or not. A good way to tell is that we have so much stage construction being financed and built, and banks don’t give out loans unless they know it’s a sure bet. Bankers have actuaries running numbers on long-term growth and looking for a return on their investment. So, we are building several studios in Ontario, and Vancouver is also expanding. I don’t know where else in Canada is, but we are the two main centres. I know other jurisdictions talk of it. Pre-Brexit I know there was talk of it in England. We’re at the point where there is always a lot of talk, but we don’t have

    shovels in the ground at the moment. The hilarious part is that we have 300,000 sq. ft of stage ready this spring, but you won’t hear anything about it because Netflix has already put a lease on it for 5 years! And look at what’s happened with you guys. Any room at Pinewood?

    Pinewood has shuttered their Atlanta operations, they’re closing their Malaysia operations, the rest are full – I’d hate to be working in their leasing department right now. I’d be worried about my job. The Toronto facility is in theory full but there’s some openings right now as Netflix doesn’t have anything ready to go right now, so they’re offering up some smaller stages until May. CBS has the rest for Star Trek, and they refuse to move. Interesting times.

     

    What about alternative studio options?

    That’s what we’re also doing. A couple of our equipment suppliers are trying to do conversions. We’re also in a property boom, so finding space close to the city core just isn’t realistic. Now it’s a case of moving out further and further and finding whatever kind of warehouse space you can and doing conversions. One of our big suppliers is William F Whites, who just opened up a studio here which is a conversion. Purpose built is a lot harder as you’ve got to find land. But you can find an old warehouse and a parking lot and how hard is it to put some walls up and some soundproofing? I mean the building I’m currently in used to be a glass factory which was turned into a studio.

    There’s always going to be real estate. There’s always going to be an empty Sears or Big Bucks store. They make great studios spaces with some money put in them.

     

    Are there any key up and coming territories offering alternative location options?

    I think things are spreading out evenly everywhere. I know there’s the question over where the work from Georgia will go if that law doesn’t get struck down. I think it’s just going to find a place to filter on its own. Serbia is becoming quite popular with European filmmakers because it’s like Croatia without the tourists. North America is always the same kinds of places. The big question is now where the work that was going to shoot in Australia is going to go ((interview at time of fires raging).

     

    I was going to ask you about that. What impact are the fires and climate change going to have on filming?

    Huge. You’re making decisions based on the situation now but for 6 months’ time. We had the same thing in 2005 with SARS. A couple of people were seen on the news in masks coming out of hospitals and the next thing we didn’t have work for a year. Studios are quick to respond but take time to react. I am hoping everyone is fine in Australia, but I can see a lot of the big studio stuff either staying away or insisting on going there to help the economy. It can go both ways these days because there’s so much clout. It’s strange, sometimes the decisions made in film are most bizarre. It could be incentives, actor’s choice, or what looks good for the company.

     

    What’s the balance usually?

    Usually cost. At the end of the day it’s all about counting. It’s show business and it’s some business.

     

    How much impact is the political situation having on decision-making processes?

    It’s instability. Studios don’t like labour unrest or instability. So, politics has an influence, case in point Georgia. Romania was a hot place to film previously. You don’t see a lot of films coming out of Saudi Arabia. I know some people who were preliminarily scouting for shows with some questionable content. It’s not just about the look, it’s about the geo-politics too. Georgia isn’t the only state in the US that has passed a law like that, it’s just most of the major studios had invested a lot of money there and it’s scared them. If you don’t think that Disney coming to the UK wasn’t a reaction to being scared out of Georgia, well, it all happened very quickly there. They got scared out of Georgia and next thing they’re making a long-term investment in the UK. What will Brexit bring? Well they’re Disney and they don’t care.

     

    You think they don’t care?

    Disney is a company that changes law. There’s a reason why the digital copyright act is called the Mickey Mouse law in the states. Between Apple, Amazon and Disney you’re seeing three of the largest companies in the world. Amazon is the one that makes no sense to me. It generates no revenue. You watch Amazon programming? How did you pay for it? Do you order Amazon TV or Prime for free shipping? Most people order Prime so you can get your socks delivered the next day and you get access to a whole TV division which doesn’t cost a dime. As a business model it derives no traffic and no revenue – it’s data mining for merchandise and that’s it. It’s the same as Apple. I know you’ll watch this, and you’ll want these products. I can sell the results of what you watch to somebody. You used to see it on a commercial and go to get it from the store – it’s the reverse now. I see what you’re watching, and I can tailor ads to you. That’s the quiet contract we’ve made with these companies – Facebook, all of them. How many times do you go online and see an ad for something you talked about with friends?

     

    You think this is a bubble that will burst though, all this production?

    Here’s the question I ask – who’s watching it all? I don’t have time to watch most of it and I make a lot of it! There’s always this idea that there’s going to be too much inner contraction, but it hasn’t happened yet. Logic just says it might have to happen. It happened with the networks – there started out too many and then it went right down.

     

    Do the streaming giants take over locations for long periods. Does that happen a lot?

    Of course. Netflix did a show called Anne with an E. The farm they used they rented for three years, even though for six months of the year they were never there!

     

    Do productions battle for the best crew and equipment too?

    You try to book people as much as you can too. I’ll use an example of Star Trek Discovery which shoots here in Toronto and they’ve got three cranes. They might not need them, but they want them in case they do so they’re not 4 in line for a piece of equipment or have to wait for it to get shipped over. If you’re smart and you have a good crew, you keep them on. It’s cheaper to hold on to them for two weeks rather than risk someone else taking them. Interesting times. It’s a business and you want the best commodities and the best everything, so you do what you need to. It equates with our wages too. We’re all making more now because there’s a glut. You want good people; it costs a little extra.

     

    Are crew being looked after better? Does it depend on the production?

    Yes – I mean two years ago when I found out that BECTU (Broadcasting, Entertainment, Communications and Theatre Union) members were finally getting contractual overtime it blew my mind. It’s something we’ve never even had to think about here – if you work it, you get paid for it, as long as it’s approved. BECTU has started the whole eyes wide awake campaign. The problem is the European way of making TV and film was always more appealing – 10-hour days. Over here we work 14, 15, 16-hour days, which is better for the bottom line but there’s a human cost. Most US studios and streamers when they go to any jurisdiction, they bring the practices from America with them but can sometimes forget the labour rules – they leave that binder at home! They try to see what they can play with where they are.

     

    What are some of the key issues you’ll be facing in 2020 as a location manager?

    Labour. The increase of production means an increase in crew is needed and so it is labour in training. And to be honest, climate. I will get a designer asking me in December, when it’s 2 degrees with snow on the ground, if there’ll be green trees in March. My answer is very simple – I don’t know! I can’t tell you anymore. It’s not predictable. Seasons used to be much more predictable. If you want to do a winter movie with snow now – good luck! Not all doom and gloom though. It’s still a great industry to be in that gives most of us a life we could never have imagined. It’s probably the last great unskilled manufacturing job that exists, where you learn from the bottom and master your craft. I wouldn’t do anything else. If I didn’t love it, I wouldn’t be doing it!

     

    John Rakich is a member and secretary of the Location Managers Guild International (LMGI).